Local approaches to global growth

Achieving growth
Watch CEOs from companies like Caterpillar, Owens Corning and Absa Group discuss building local capabilities as a way to expand globally.

Over 60 economies were named by CEOs as key markets for global expansion. CEOs are looking to grow business globally beyond their home base and are simultaneously building local capabilities in each of their important markets. They are extending operational footprints, building strategic alliances and creating networks that include R&D, manufacturing and services support.

Over 60 countries were named among the most important for growth prospects

(c) 2011-2012 PwC. All rights reserved. PwC refers to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firms professional judgment or bind another member firm or PwCIL in any way.

Outlook for M&A in 2012
CEOs in developed economies were active deal-makers in 2011, with 26% completing a cross-border transaction, and were also more likely to have divested an operation. Responses this year indicate the potential of a modest pull-back on international deal-making over the next 12 months: 28% of CEOs globally plan to complete a cross-border deal in 2012, a decline from the 34% who agreed last year.

(c) 2011-2012 PwC. All rights reserved. PwC refers to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firms professional judgment or bind another member firm or PwCIL in any way.

(c) 2011-2012 PwC. All rights reserved. PwC refers to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firms professional judgment or bind another member firm or PwCIL in any way.

Quotes

The real prize in any emerging market is getting at the base of the pyramid, the B minus and the C customer who has income in that $8,000–$12,000 range. So we’ve changed our product offerings, our approach and our business model to be able to target a more affordable offering for that consumer, and that has unlocked an enormous amount of growth for us in Latin America.

Our goal is to maintain market share in the mature markets. Those markets generate a lot of earnings so we have no plans to shrink our presence there. On the other hand, we are planning to invest substantially in the emerging markets.

Many multinationals are talking about coming to Africa but not many are moving into Africa. I think that will change. Because of the economic situation in Europe and in the US and because of China as a major trade partner with Africa, people will invest more in Africa so they can capitalise on that trade route.

We know who our competitors are in the developed world, but when you look at emerging regions with high growth, that’s where you next competitor is likely to emerge. The only way we’ll be able to compete is if we’re there and doing everything locally. And that’s where our big push has been.

In the emerging market, we have primarily adopted an ‘attack’ strategy. That means we have to pay more attention to market share at the beginning instead of profit. We would say that it is difficult to make money if market share is less than 10%.

We had to reinvent the technology of pre-charging our phones to accommodate much smaller denominations. We had to come up with over-the-air technology that would transfer funds as needed, bring the cost down and allow people to just have the minutes in their phone that they needed for a specific period of time.